Rural dwellers expected to benefit from the extension, says Housing Minister Darragh O’Brien

The state scheme that provides funding to help people to purchase their own homes is to be extended to those building their own homes.

From this week, the First Home scheme is to be widened to include self-builders who are constructing their first home.

The scheme was set up to help first-time buyers to bridge the gap between their mortgage, deposit and the price of a new home.

With €400m put into it, the scheme had approved 2,000 first-time buyers in its first year, with this figure set to be exceeded in year two, its chief executive Michael Broderick said.

Up to now, it has been open to people buying newly built houses and apartments in private developments, and to renters whose landlords are seeking to sell the property they are renting.

Extending it means that self-build customers can benefit from ­financial support of up to 30pc of the total build cost of their home, to add to their self-build mortgage and deposit. Applications from self-build customers can be made online from tomorrow.

The shared equity scheme was rolled out in July last year.

It means the state body, First Home Scheme Ireland, takes a stake in the home that can be redeemed later.

Typical support for those using the scheme is €68,000. The scheme application process runs in parallel with the mortgage application process.

Mr Broderick said this meant that self-build mortgage applications should continue to be made separately through participating lenders.

The scheme is available to qualifying homebuyers and self-build customers who are taking out mortgages from AIB, Bank of Ireland or Permanent TSB.

In its first year, almost 2,000 buyers in 24 counties were approved for the scheme and almost 500 homes in 20 counties were bought using the scheme.

Eligibility for the scheme was extended to thousands of additional first-time buyers with effect from January 1, following the widening of eligibility criteria for homes in 30 of Ireland’s 31 local authority areas, with the limit for eligible homes increasing by up to €75,000.

Houses with prices of up to €475,000 and apartments with prices of up to €500,000 are currently eligible for the scheme, depending on their location.

Approximately 80pc of live approvals have been for buyers in Dublin, Cork, Kildare, Meath and Wicklow, with the remaining approximately 20pc spread across 19 counties throughout Ireland.

Housing Minister Darragh O’Brien said those who were building their own homes could now benefit from this scheme, which was a particularly important development for people who live in more rural locations who may have a site but not the full level of finance they need to build their new home.

“We designed this scheme to be flexible and to evolve so that it can help as many people as possible,” Mr O’Brien said.

“We previously extended it to help renters looking to buy their home from their landlord and now it’s the turn of self-builders.”

Source: Charlie Weston, Irish Independent 19/09/2023

Important Information Regarding Upcoming Affordable Housing Schemes

*Update as of September 2023

Cork County Council will advertise, in due course, the respective Affordable Housing Schemes when they are set to become available. Schemes will be advertised publicly via the Council’s website, social media channels and via print media. Advertisements will direct interested parties to the appropriate website/online platform from where they will be able to access the respective documentation (application form, FAQs, eligibility criteria, income limits, Priority Agreements, time frames etc.) and to make an application via the online portal.

Upcoming Schemes:

The following schemes are due to become available in the next number of months:

Steps involved when making an application:

Step 1:

Registering:

• Register with the online platform. You will need the following information: your full name, a valid & active email address & a mobile phone number. You will generate a registration verification number via text message, which you will enter to complete the set- up process.

Step 2:

Log on:

• You will then be able to log on to the on-line platform to begin your application process. As part of this log in, you will generate a verification number via text message to your mobile device. You will then need to enter this six-digit code to log in.

Step 3:

The Application:

• You will be presented with a number of tabs, each of which will need to be completed.

Required documentation to support your application on the online portal.

• A mortgage Approval in Principle stating the maximum mortgage available to you. While it is not a requirement, it is recommended that applicants have their Mortgage Approval in Principle prior to applying for Affordable Housing, or at least be in a position to apply for a mortgage.
• Proof of income: PAYE employees: Salary Certificate, Employment Detail Summary, and payslips (3 if paid monthly, 6 if paid fortnightly and 12 if paid weekly). Self-Employed: Documents for previous 2 years: – Audited/Certified Accounts, Tax Balancing Statement and Tax Payment Receipt
• Proof of Citizenship: passport or birth certificate
• Proof of Right to Reside in Ireland: e.g. GNI Stamp 4
• Photographic Identification: Any one of the following documents: current valid passport, driving licence, National Age Card issued by An Garda Siochana, an identification form with a photograph signed and stamped by a member of An Garda Siochana.
• Proof of Present Address dated within the last 3 months. Any one of the following documents: Current utility bill (gas, electricity, telephone, mobile phone, or internet bill), bank statement/credit union statement, document issued by government department that shows your address, Statement of Liability P21 from Revenue.
• Proof of PPSN/Tax Registration Number: Any one of the following documents: Statement of Liability P21, Tax Assessment, Notice of Credits from Revenue, Letter from Revenue Commissioners addressed to you showing PPSN, employee details from Revenue, Receipt for social welfare payment, Letter from Department of Employment Affairs and Social Protection addressed to you showing your PPSN, Medical Card, Drug Payment Scheme Card, Payslip, P45
• Evidence of savings/deposit: up-to-date bank/savings account statements
• Evidence of first-time buyers’ status: completion of a self-declaration on the online portal and/or Revenue Help to Buy approval obtained from the Revenue Commissioners is an alternative documentary proof.
• Confirmation of eligibility for the Help To Buy Scheme: print out from Revenue portal – myAccount (PAYE applicants), ROS (Self-assessed applicants) confirming names of applicant(s) and maximum entitlement under the scheme. (Note that applicants are considered first-time-buyers only if BOTH are buying their home for the first time). VisitRevenuefor more information.

Source: Cork County Council

July saw a 22pc rise in the number of new buyers borrowing compared with last year

Rising numbers of first-time buyers are being approved for mortgages despite a sharp slowdown in the wider home-loan market.

Latest figures from the banks show a 22pc rise in the number of new buyers getting the green light to borrow in July compared with last year.

This is despite a surge in mortgage rates after a succession of European Central Bank rate rises and a cost-of-living crisis that is squeezing consumer budgets. Typical fixed rates are now around 4pc.

There was a 10pc fall in the overall numbers cleared for a home loan.

A collapse in the number of switchers had dragged overall mortgage-approval numbers down, the Banking and Payments Federation Ireland (BPFI) said.

Last month, banks approved a total of 4,747 mortgages. First-time buyers got 2,918 mortgages. This works out at six out of 10 of the overall numbers approved for a loan to buy a home.

Mover-purchasers accounted for 1,148 approved, or 24.2pc.

The overall number of mortgages approved fell slightly in July compared with the previous month, but was down 9.7pc on the same period last year.

Mortgages approved in July were valued at €1.35bn. First-time buyers accounted for €837m of this, with mover-purchasers accounting for €391m.

The value of mortgage approvals remained the same month-on-month but fell by 6.7pc over a year.

But there has been a huge fall in switching activity as mortgage hikes, particularly those from non-bank lenders, have made moving mortgage provider less attractive.

Remortgaging or switching activity fell by 78.6pc in volume terms year-on-year, and by 80pc in value in the same period.

New-buy activity is being boosted by the State’s Help to Buy and First Home schemes, and by banks offering lower-rate “green mortgages” that apply to newly-built homes.

The average first-time buyer was approved for a mortgage of €287,000 in July, up €10,000 on the average for the same month last year. This reflects rising property prices.

Ali Ugur, chief economist of the BPFI, said that the mortgage approval figures showed that, despite a wider market slowdown, first-time buyer activity remains strong.

He said it was the fifth successive month in which first-time buyer mortgage approvals had risen in year-on-year terms.

“This sustained growth meant that almost 30,000 first-time mortgages, valued at nearly €8.4bn, were approved in the 12 months ending July 2023, the highest annualised levels since the data series began.

“In addition to the more than 22,000 Help to Buy applications reported by the Revenue Commissioners up to the end of July, these approval figures demonstrate that the pipeline for FTB mortgage drawdowns remains very strong.”

Mr Ugur added that, in the last year, the value of mover-purchase approvals was close to €3.9bn, the highest value since the series began.

“However, this in part reflects rising average mortgage values, with the average mover-purchase approval exceeding €340,000 for the first time, at €340,957 in July 2023,” he said.

Overall, there were 55,246 mortgage approvals in the year to July, valued at €15.4bn.

European Central Bank rates have risen nine times since last year, with the three main banks pushing up their fixed rates by around 1.5 percentage points over that period.

The interest rate on new mortgages has hit its highest level in years and is expected to rise even more in the coming months.

At 4.04pc, the average interest rate on a new mortgage in Ireland rose significantly from 3.84pc in May, according to the most recent figures from the Central Bank.

The 0.20 percentage point jump on the average in June was the second biggest increase in the Eurozone.

Soucre: Charlie Weston, Irish Independent, 25th August 2023

Buyers are being forced to pay more for homes despite a fall in transactions in the market over the last year.

New figures based on the State’s Property Price Register show that the typical price of a home was up €28,000 in the second quarter of this year compared with the same period last year.

The median, or typical, price is now €318,000, according to data technology company Geowox.

This means sales prices were up almost 10pc in the three months to June compared with the same period last year.

A total of 13,378 houses were sold between April and June. This was down 4.8pc when compared with the same period last year. This amounts to 672 fewer residential property sales. ​

Just 2,466 of those sales were for new homes, Geowox’s analyst Marco Giardina said in a report.

The data shows a bigger rise in new home prices than those for second-hand homes. This is in keeping with Central Statistics Office property price index figures.

Geowox said new homes had a typical price of €410,000 in the second quarter. This is up 9.3pc in the past year.

Just two years ago, a typical new home was selling for €345,000.

New home sales are being boosted by two state schemes for new buyers, the First Home scheme and the Help-to-Buy scheme.

For second-hand homes, the typical sales price was up 5.5pc in the past year to €290,000. This is up from €240,000 in the second three months of 2021.

Wicklow is the most expensive county, with typical prices for a home of €425,000. Buying is far less expensive in the north-west counties, where prices range from €150,000 to €185,000, the Property Price Register shows.

Leitrim has the cheapest houses, with a median price of €150,00. Roscommon is not far off with a median sales cost of €160,000.

Cork and Galway are at the other end of the scale. In Cork the typical sales price is €306,000, with Galway homes selling for €290,000.

Around county Dublin and its commuting counties of Wicklow, Meath and Kildare, prices are higher than the national median.

Prices nationally have been shooting up since 2013, when the median price of a residential property was around €130,000.

As recently as the second quarter of last year, the typical price was €290,000.

Every county experienced a rise in property prices with the exception of Clare. Typical prices in Laois have surged by 22pc when compared with a year ago. In Longford, prices shot up by 21.4pc.

In Tipperary, Louth and Mayo prices jumped by between 15pc and 16pc.

In the capital, there were big jumps in prices in the Dublin 1 and 2 postcode areas. Dublin 6 had a 28pc fall in prices in the last year.

The typical price for an apartment is now €270,000, up from €166,000 in 2016. For houses, the median price is €328,000, up from €186,000 in 2016.

Source: Charlie Weston, Irish Independent 4th August 2023

Sort It: Regardless of the budget, there will always be areas that will need to be scaled back

Making your home renovation dreams come true can be a challenge, especially when your budget doesn’t quite align with your wishes. We all have that wishlist of improvements we would love to make, but sometimes reality forces us to make compromises. We all feel we could do more if we had more money, but the truth is, regardless of the budget, there will always be areas that will need to be scaled back. The key is to be realistic and invest in the areas that will enhance your quality of life. Here are some helpful tips to navigate this process and ensure you make the most of your budget.

Cost

Be realistic about your financial situation. Take the time to research and understand the costs of the home renovation project you plan to undertake. While it may be tempting to rely on the experiences of family or friends who have completed similar work, keep in mind that their projects might have been done a long time ago. Furthermore, people often downplay costs to make it appear as though they received a great deal. So, instead of relying solely on others’ experiences, gather information from reliable sources and professionals in the industry.

When planning your renovation, don’t forget to consider the additional costs associated with refurbishment and building. It’s not just about the new extension; you need to factor in the expenses involved in integrating the existing structure with the new addition. Will there be any other work required, such as plumbing or electrical upgrades? These hidden costs can quickly add up, so it’s important to account for them from the beginning.

Non-negotiables

Identify the elements you refuse to compromise on. These aspects typically have a lasting impact on your daily life and overall satisfaction with the project outcome. Quality is often a non-negotiable criterion for many homeowners as it directly influences the aesthetics, functionality and longevity of the finished product. A well-executed, high-quality finish can elevate your living experience and add value to your property in the long run.

Layout

The layout of your home is another crucial aspect you shouldn’t compromise on. Investing time and effort into getting the layout right can save you money in the long run.

Consider how you use your space and how it can be optimised to better suit your needs. Simple changes, like opening up the kitchen to create a more sociable and functional area, can have a significant impact without breaking the bank.

Energy efficiency

Improving your home’s energy efficiency is another area worth prioritising. While it may not be the most glamorous aspect of a renovation, investing in insulation, heating systems and high-quality windows is a wise choice. These improvements not only enhance your comfort and quality of life but also contribute to long-term energy efficiency and cost savings. Prioritise these essentials to create a comfortable and sustainable home environment.

Trade-offs

Making significant savings may involve sacrificing speed, as cutting costs often requires allocating fewer resources to the project. This can lead to a longer timeline, with tradespeople fitting your project in between other commitments. While this may extend the duration, it can be a reasonable trade-off if your budget is a primary concern.

Budgeting

Think ahead and spend on elements that will be costly to replace or upgrade in the future. For example, investing in durable flooring, quality kitchen appliances or well-constructed cabinetry can save you from costly replacements down the line. By making these wise investments now, you’ll avoid the need for costly renovations in the near future.

Patience

Remember, you don’t have to do everything at once. Prioritise your renovation goals and tackle them in stages. By breaking down the project into manageable phases, you can spread out the financial burden and give yourself time to save for each stage. This approach allows you to enjoy the process and appreciate the progress as your home transforms over time.

Planning

No matter which compromises you decide to make, effective planning and communication are vital to ensure the smooth execution of your project. Set clear expectations from the outset and establish open lines of communication with your contractors and tradespeople. Discuss your priorities and non-negotiables, and strive for transparency regarding timelines, costs and quality expectations. Doing so minimises the chances of misunderstandings and fosters a collaborative environment that aligns with your goals.

Unwise compromise

While compromises are often necessary, certain scenarios should serve as red flags, warning against sacrificing certain criteria. Quality should rarely be compromised, as it directly impacts your long-term satisfaction with the project. Cutting corners or accepting poor workmanship can lead to costly repairs, replacements and ongoing dissatisfaction.

When it comes to the safety and structural integrity of your home, compromising is never advisable. Ensuring compliance with building regulations and engaging experienced professionals are essential for a successful project. Prioritise the structural soundness of your home and the wellbeing of your family above all else.

Source: Denise O’Connor, The Irish Times, 07/07/2023

Borrowers have been warned to brace themselves for a ninth rise in European Central Bank (ECB) rates.

The latest imminent hike means 400,000 mortgage borrowers are exposed to a “ticking time bomb” of higher rates over the next two years.

These are people on tracker rates, variables and those coming to the end of fixed rates.

This year alone, more than 60,000 homeowners are due to come to the end of a fixed rate, which will put a massive squeeze on their finances.

The ECB is expected to announce another 0.25 percentage points rise in its key rates next week.

The move will mean some people coming off a fixed rate could end up paying an extra €3,500 over a year to lock in to a new one after a succession of increases in the cost of new fixed rates in the last year.

Analysts are expecting another 0.25 points rise in September, at which point they expect ECB rates to peak, according to a survey of economists across Europe carried out by the news wire service Bloomberg.

Mortgage broker Michael Dowling, of Dowling Financial in Dublin, said around 60,000 mortgage holders would be coming to the end of fixed rates this year.

He said fixed rates had risen by between two percentage points and 2.5 points since they last fixed.

This means a family on a €300,000 mortgage will typically be coming off a 2.75pc fixed rate.

Now they will be faced with fixed rates of 4.5pc.

These consumers will face almost €300 a month in higher repayments, which works out at more than €3,500 over a year, he said.

About 120,000 mortgage accounts are on tracker rates, according to Mark Coan of money guide MoneySherpa.ie. These borrowers will be automatically hit with higher lending rates.

Around 164,000 are on variable rates, with many of these unable to opt for a fixed rate because their mortgage was sold to a vulture fund, and past arrears issues have turned them into mortgage prisoners.

Mr Coan said that, according to the latest Central Bank financial stability note published in April, 64,093 residential fixed rates would rise this year, and 71,214 next year.

This means 135,307 in total potentially rolling on to variable rates in the next two years.

The same report puts the combined number of variable mortgages, including trackers, at 284,858.

That means 420,165 mortgages are exposed to interest rate increases over the next two years, when those on variable, tracker and those coming off a fixed rate are added together.

“There is a time bomb ticking under the Irish mortgage market with 420,000 mortgages due to be hit with rates north of 4.5pc,” Mr Coan said.

“By the time households cotton on to the hikes, it’s likely the current low fixed-rate options will have been withdrawn from the market.”

He said most people did not realise they could switch to a longer-term fixed rate now without a breakage fee.

“If you are on a short-term fixed rate, variable rate or tracker rate, you should talk to a broker as soon as possible to get market-based advice on your switching options.”

Start Mortgages recently wrote to thousands of its customers to tell them their mortgage rates would rise by 0.75 of a percentage point this month.

Last month, 9,500 mortgage prisoners, whose loans are serviced by Pepper Finance, were told they are due to get letters this month telling them rates are rising by up to one percentage point.

Credit union mortgage rates are the only ones that have not gone up in the last year.

This is because credit union lending rates are not dictated to by the ECB rate. Instead, loans from the credit unions are funded from member savings.

The key ECB refinancing rate is 4pc, but is expected to go to 4.25pc when the ECB governing council meets on Thursday week.

Daragh Cassidy, of price comparison and brokerage Bonkers.ie, said the ECB was likely to hike its main lending rate, off which trackers and variable rates are priced, to 4.25pc when it meets next week.

He said there was a good chance that the key ECB refinancing rate could hit 4.50pc in September.

“This means the average tracker ­customer could soon be paying a rate of around 5.6pc or 5.7pc while the best rate available to prospective first-time buyers will likely be over 5pc by the end of the year,” he said.

Source: Charlie Weston, Irish Independent 18/07/2023

Easing of mortgage borrowing rules for first-time buyers and ongoing Government supports are underpinning prices, says report

Mon Jul 10 2023 – 05:00

Asking prices for Irish homes picked up in the three months to the end of June following three quarter-on-quarter declines in a row, as the market showed signs of stabilising even as interest rates continued to climb, according to MyHome.ie.

The average asking price for a home increased by 4.3 per cent in the second quarter compared with the first three months of 2023, and are now 2.2 per cent higher than the same time last year, at €325,000, according to MyHome, which is part of The Irish Times group.

That compared to a 0.4 per cent quarter-on-quarter drop in the first three months of the year.

[ Does the Government really want house prices to fall? ]

[ Sherry FitzGerald flags thousands of properties lost to rental market ]

Dublin prices rose 3.3 per cent in the period to the end of June and at an annual rate of 0.6 per cent, according to the latest data. Homes outside the capital increased by 4.6 per cent on the quarter and by 3.5 per cent year-on-year.

The report also points to more realistic pricing by sellers as homes are now being sold for 1.4 per cent over the asking price, on average, down from between 5 and 6 per cent in the middle of last year.

MyHome.ie said prices are being underpinned by an easing of Central Bank borrowing rules for first-time buyers at the start of the year and by ongoing Government supports for people looking to get a foot on the property ladder, as well as a shortage of properties on the market.

This has more than offset the impact of the European Central Bank (ECB) continuing to raise official rates this year. Its main lending rate moved from zero to 2.5 per cent between last July and December, and has since risen to 4 per cent.

“The stabilisation of the market is to be welcomed,” said Joanne Geary, managing director of MyHome.ie. “The Government’s demand-side initiatives and looser Central Bank lending rules appear to be negating the effects of rising interest rates, but we also need to see available properties on MyHome.ie approach the pre-pandemic figure of 20,000 to make a meaningful difference.”

There are currently just 14,000 properties listed for sale on the company’s website.

Conall Mac Coille, chief economist at Davy and author of MyHome.ie’s latest quarterly report, said an overall decline in Irish house prices this year still “cannot be ruled out, given the prospect of further ECB rate hikes”. However, he said an annual drop in values now appears less likely.

“We have left our forecast for asking price inflation unchanged at 1.5 per cent through 2023 but have revised up our forecast for housing completions to 29,500,” he said. Davy previously estimated that completions would fall to 27,500 units this year from almost 30,000 in 2022.

Separately, a new report suggests activity in the Irish construction sector expanded in June for the first time since last September.

The BNB Paribas Real Estate Ireland construction purchasing managers’ index rose to 50.4 in June from 49.4 in May, the company said. A reading above 50 indicates that activity is growing.

John McCartney, head of research at BNP Paribas Real Estate Ireland, said the increase “has been coming for a while, with building firms consistently reporting increased new orders and staffing levels since the start of this year”.

Still, the subsector reading for housing activity was only 48.4, marking a ninth successive month of decline. Mr McCartney said the viability of apartment building amid higher constriction cost and interest rates in recent times “remains challenging” in particular. Still, he expected new home completions to reach 30,000 this year.

Source: The Irish Times 10/07/23

If you are struggling to understand any of the current Government schemes, or you are not sure which of these you can avail of, the link below is an excellent way of getting your head around the information.

https://www.gov.ie/en/publication/5568b-housing-for-all-available-supports/

Housing for All – Available Supports, explains in detail how you can benefit from using these schemes to purchase your home.

If you would like to have a chat about any of the schemes available, please give us a call on 028 33775 or via email to admins@mtf.ie

We hope this information helps you with your future home plans.

John

Property industry says prices will continue to grow as higher interest rates send global markets into reverse

The property industry here insists on Irish exceptionalism. Because of the mismatch between supply and demand, they insist the drag from higher interest rates won’t be enough to trigger a reversal in prices, like the ones we’re seeing in the UK, the United States, Canada, Australia, New Zealand (the list goes on).

In other words, the pressure on prices from the lack of supply is too strong to be trumped by higher mortgage costs (an obvious demand dampener). It’s a big call and maybe the industry is right. We’ll find out in a few months. The latest figures from the Central Statistics Office (CSO) show prices fell on a monthly basis by 0.6 per cent in January, anchoring the annual rate of inflation to 6.1 per cent, down from 7.7 per cent previously.

Year-on-year inflation in Dublin was put at just 4.3 per cent, while prices on a monthly basis in the capital fell by 1.1 per cent. And remember these figures stem from transactions that happened up to three months ago, in advance of the recent spate of mortgage rate hikes from providers here and in advance of the European Central Bank’s planned hikes this month and next. In other words, the dampening effects of higher borrowing costs have still to play out.

Many analysts believe the industry is underestimating the impact of these higher interest rates and that we will soon see a price correction of some sort.

“Some of the forecasts for growth this year seem wildly optimistic,” says Daragh Cassidy, head of communications at price comparison website Bonkers.ie. He suggests the affordability constraint imposed by higher rates will almost definitely send prices into reverse. His rationale is that those borrowing €300,000 over 30 years on a mortgage rate of about 2 per cent – the rate available at the beginning of last year – would have had a monthly repayment of €1,109 a month.

If rates go to say 5 per cent (they’re expected to go to at least 4 per cent) to keep the same monthly repayment of about €1,109, either the amount borrowed or property prices would need to fall by about 30 per cent. That strain on affordability will outweigh the current demand-supply dynamic, he says.

Source: The Irish Times, Thursday 16th March 2023